Inventory Management: Keeping the Balance

Dec 2, 2009

It’s my opinion that managing your inventory is a critical operation and needs to be handled very carefully; otherwise you can sink the ship really quickly. Inventory management software helps in terms of keeping track of your goods on hand, and plays its role in keeping your sales people informed of what you have to sell. There are many ways to track your inventory such as bar coding software, which is a more precise way to track your items in stock. There are popular software suites that can help you greatly if used correctly, but the main issue is to make sure that whatever program you chose it is compatible with your invoicing software to help with the inventory tracking.

By using this, you can track the trends of parts as they are sold weekly, monthly and yearly. This will help you get a grasp on what parts you need to stock up on and what you should keep at a minimum. Have your inventory area well thought out; have your shelves marked so that even new personnel can find products on the shelf. I suggest having areas that are dedicated to specific type items, such as all engine parts together, all turbo parts together so on and so forth.

Product

What products are carried in your store? What are the new trends and what should you consider putting on the shelf? These are the questions that need to be answered.

It’s not as simple as one may think, and if you have a specific clientele, you most likely want to try and cater to their need and wants. There are times where you want to try something new, this is not necessarily bad thing, but you must make sure that you are moving in the right direction. How do you determine what new items you should bring into the store? What I suggest is to do some homework, ask your customers their opinion, read some of the latest write ups on the items, do some internet surfing, whatever you can do to gather much needed valuable information. Just bear in mind that opinions are free, so take them into consideration, but do not count on them as gospel, do your own research, and sometimes you have to go with your gut feeling, just don’t run away with it!

Planning

Plan for your buying and inventory management, as you start to conjure up dreams of getting rich off the newest trend, make sure you’re on the path that corresponds to your market. For instance, if your bread and butter happens to be in the wheel and tire business, you might want to really step back and take a minute to think about going into the tuning or engine building business, and understand what you’re getting yourself into up front.

Trade Shows

There are lots of opportunities at shows such as PRI (Performance Racing Industry) in Florida, which mainly caters to the needs of the racing and high performance segment of the market, and offers up the kind of eye candy only a true gear head can appreciate.

The other notable show is SEMA held in Las Vegas, which covers the entire spectrum of the automotive aftermarket. Then of course you have some of the foreign shows such as the Tokyo Auto Salon in Japan, where if you’re into the whole Japanese car tuning arena, it’s like going to Mecca.

The ideas that can flow at one of these shows are unbelievable, and can pull you in so many directions; it’s sometimes hard to see straight. The value of attending shows such as these are the precursor to what is new and hot, and if you pay close attention, you just might find a few new items that are going to bolster your sales, but as I mentioned before just make sure you’re looking at items that are applicable for your industry and client base. Now if you’re trying something different and trying to gain some new ground, and look for customers in other areas by bringing on a new products range or line, this is another thing entirely. There are times that this might be a great move, as there are times that a change is good for a company, and if you happen to stumble upon a product that you believe will sell, jump on it, just do it with careful planning and research.

Items of the New

What are some items I should look at to grow or enhance my business? Well, each business is different, and has different needs. What I suggest is to examine the opportunities and see how they might fit into your business model. You might go to a trade show and see something that really floats your boat, but make sure not to jump on the band wagon too quickly! Sometimes we act like retail customers ourselves and get caught up on impulse buying, this you have to be very careful with, because you may end up with a commitment you were not ready for.

There are times where manufacturers will require a large buy in to be able to acquire their products, so with this in mind, it may or may not deter you from carrying the product line, however sometimes you can bypass this by buying from an authorized distributor. If you start buying product through a distribution channel and the product does well for you, then this would be the time to look at buying direct from the manufacturer, however be prepared to pull out your wallet, and even still there will be a point where you still might not be able to purchase enough product to get the desired price.

Distributors can buy in massive quantities and with this enormous buying power leverage the manufactures for the best prices, and then still allow themselves enough profit margin to sell to smaller shops at a decent price which still allows the retailer margin to make money on their retail customers.

In Short

In short, when coming to a conclusion about your inventory management and product tracing, just make sure you’re making well thought out decisions, and you will succeed!